Procedure for NRI Investment in Bonds

When the issuer offers the bonds for purchase, there will be a limited time frame for the subscription. Some of the popular bonds may get oversubscribed in a few days and the issue might get closed for subscription. NRI investors, therefore have very limited time to subscribe for a bond issue. They can either subscribe to it over online brokerage platforms or issue a Power of Attorney (PoA) to a known person, who can apply in physical form, on the NRI investor’s behalf. The bonds in the Indian debt market are available for NRIs on both repatriable and non-repatriable basis.

NRI investments in bonds can be made through both NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts.

  1. To subscribe on Repatriable basis – to be applied from a demat account linked to an NRE account, if applying online. If applying physically, the application should be through rupee dominated cheque/bank draft from an NRE Account.
  2. To subscribe on Non-Repatriable basis – To be applied from a demat account linked to an NRO account, if applying online. If applying physically, the application should be through rupee dominated cheque/bank draft from an NRO Account

How to purchase bonds through SMEST:

  1. The Investor can reach out to our offices via phone, email or whatsapp and enquire for the Quotes for any specific bond that they require.
  2. Upon confirmation of the Price/Yield, the NRI investor can ask for a ‘Deal Confirmation’ which is a deal sheet that will contain all the relevant information to the trade
  3. The Investor can choose to settle the trade on the same day, which is known as T+0 (subject to confirming before 14:00 hours) or the next day which is known as T+1.
  4. The Investor has to furnish the KYC documents to SMEST. For Individuals: POI – Pan Card, POA – Aadhar Card, Cancelled Cheque Copy, Client Master List for DMat Account
  5. Investor has to make an RTGS for the total consideration amount to BSE – Indian Clearing Corporation Limited
  6. As soon as the pay-in of the funds is made via the Investor on the Bombay Stock Exchange, the trade will get settled and SMEST will send the investor a settlement report which means the bonds will get credited to the investor’s DMat Account.

 



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